ICC advises the UN on the Taxation of Technical Services (2014)

ICC’s Perspectives on the Taxation of Technical Services

Upon request from the United Nations Committee of Experts on International Cooperation in Tax Matters, ICC submitted its views on the taxation of Technical Services to feed into the UN’s work on the UNModel Convention.

The letter to the Committee calls for a coherent multilateral framework on the taxation of technical services that would allow for a consistent approach on the taxation of technical services by all countries.

In this regard, ICC would applaud increased synergy between the UN Committee of Experts in Tax Matters and the work currently conducted by the OECD, mandated by the G20,on Base Erosion and Profit Shifting (BEPS). Furthermore ICC underlines that the inadequately working dispute resolution mechanism triggers double taxation and, therefore, negatively impacts direct investments and global economic growth and wealth.

The letter further addresses the definition of the technical services as well as a possible withholding tax mechanism. ICC suggests to place the Article on Technical Services in Article 7 of the UN Model Convention as an exception to the general principle of permanent establishment based taxation, or in a separate Article.